HB 227: "An Act relating to medical assistance reform measures; relating to administrative appeals of civil penalties for medical assistance providers; relating to the duties of the Department of Health and Social Services; relating to audits and civil penalties for medical assistance providers; relating to medical assistance cost containment measures by the Department of Health and Social Services; relating to medical assistance coverage of clinic and rehabilitative services; and providing for an effective date."
00 HOUSE BILL NO. 227 01 "An Act relating to medical assistance reform measures; relating to administrative 02 appeals of civil penalties for medical assistance providers; relating to the duties of the 03 Department of Health and Social Services; relating to audits and civil penalties for 04 medical assistance providers; relating to medical assistance cost containment measures 05 by the Department of Health and Social Services; relating to medical assistance coverage 06 of clinic and rehabilitative services; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 09 to read: 10 MEDICAL ASSISTANCE REFORM: LEGISLATIVE FINDINGS AND INTENT. 11 The legislature finds that the current Medicaid program is not sustainable. Although annual 12 growth has fallen from 6.45 percent to 4.8 percent, further reductions are needed. In order to 13 maintain a viable Medicaid program, it is the intent of the legislature that
01 (1) the governor, through the Department of Health and Social Services, take 02 all necessary action to capture federal revenue and offset state general funds and evaluate the 03 most cost-effective method for revising expansion coverage, including more efficient benefit 04 plans, cost sharing, utilization control, and other innovative health care financing strategies; 05 (2) the Department of Health and Social Services be instructed to 06 (A) evaluate and implement meaningful Medicaid reform measures, 07 including working with tribal and community partners to develop innovative practices 08 leading to a sustainable Medicaid program available for future generations; 09 (B) evaluate all options available to it, including 10 (i) obtaining waivers to the Medicaid program to address 11 choice, statewide compatibility, or other core Medicaid requirements; and 12 (ii) regulatory action to improve provider and recipient 13 compliance with program rules; 14 (3) the Department of Health and Social Services establish prevention of 15 disease as a primary model of health care in the state, as requested by the legislature in 16 Legislative Resolve 16 of the Twenty-Seventh Alaska State Legislature. 17 * Sec. 2. AS 44.62.330(a) is amended by adding a new paragraph to read: 18 (47) Department of Health and Social Services relating to civil 19 penalties assessed against medical assistance providers under AS 47.05.250. 20 * Sec. 3. AS 47.05.010 is amended to read: 21 Sec. 47.05.010. Duties of department. The Department of Health and Social 22 Services shall 23 (1) administer adult public assistance, the Alaska temporary assistance 24 program, and all other assistance programs, and receive and spend money made 25 available to it; 26 (2) adopt regulations necessary for the conduct of its business and for 27 carrying out federal and state laws granting adult public assistance, temporary cash 28 assistance, diversion payments, or self-sufficiency services for needy families under 29 the Alaska temporary assistance program, and other assistance; 30 (3) establish minimum standards for personnel employed by the 31 department and adopt necessary regulations to maintain those standards;
01 (4) require those bonds and undertakings from persons employed by it 02 that, in its judgment, are necessary, and pay the premiums on them; 03 (5) cooperate with the federal government in matters of mutual 04 concern pertaining to adult public assistance, the Alaska temporary assistance 05 program, and other forms of public assistance; 06 (6) make the reports, in the form and containing the information, that 07 the federal government from time to time requires; 08 (7) cooperate with the federal government, its agencies, or 09 instrumentalities in establishing, extending, and strengthening services for the 10 protection and care of homeless, dependent, and neglected children in danger of 11 becoming delinquent, and receive and expend funds available to the department by the 12 federal government, the state, or its political subdivisions for that purpose; 13 (8) cooperate with the federal government in adopting state plans to 14 make the state eligible for federal matching in appropriate categories of assistance, and 15 in all matters of mutual concern, including adoption of the methods of administration 16 that are found by the federal government to be necessary for the efficient operation of 17 welfare programs; 18 (9) adopt regulations, not inconsistent with law, defining need, 19 prescribing the conditions of eligibility for assistance, and establishing standards for 20 determining the amount of assistance that an eligible person is entitled to receive; the 21 amount of the assistance is sufficient when, added to all other income and resources 22 available to an individual, it provides the individual with a reasonable subsistence 23 compatible with health and well-being; an individual who meets the requirements for 24 eligibility for assistance shall be granted the assistance promptly upon application for 25 it; 26 (10) grant to a person claiming or receiving assistance and who is 27 aggrieved because of the department's action or failure to act, reasonable notice and an 28 opportunity for a fair hearing by the office of administrative hearings (AS 44.64.010), 29 and the department shall adopt regulations relative to this; 30 (11) enter into reciprocal agreements with other states relative to 31 public assistance, welfare services, and institutional care that are considered advisable;
01 (12) establish the requirements of residence for public assistance, 02 welfare services, and institutional care that are considered advisable, subject to the 03 limitations of other laws of the state, or law or regulation imposed as conditions for 04 federal financial participation; 05 (13) establish the divisions and local offices that are considered 06 necessary or expedient to carry out a duty or authority assigned to it and appoint and 07 employ the assistants and personnel that are necessary to carry on the work of the 08 divisions and offices, and fix the compensation of the assistants or employees, except 09 that a person engaged in business as a retail vendor of general merchandise, or a 10 member of the immediate family of a person who is so engaged, may not serve as an 11 acting, temporary, or permanent local agent of the department, unless the 12 commissioner of health and social services certifies in writing to the governor, with 13 relation to a particular community, that no other qualified person is available in the 14 community to serve as local welfare agent; for the purposes of this paragraph, a 15 "member of the immediate family" includes a spouse, child, parent, brother, sister, 16 parent-in-law, brother-in-law, or sister-in-law; 17 (14) provide education and health-related services and referrals 18 designed to reduce the number of out-of-wedlock pregnancies and the number of 19 induced pregnancy terminations in the state; 20 (15) investigate reports of abuse, neglect, or misappropriation of 21 property by certified nurse aides in facilities licensed by the department under 22 AS 47.32; 23 (16) establish state policy relating to and administer federal programs 24 subject to state control as provided under 42 U.S.C. 3001 - 3058ee (Older Americans 25 Act of 1965), as amended, and related federal regulations; 26 (17) administer the older Alaskans service grants under AS 47.65.010 - 27 47.65.050 and the adult day care and family respite care grants under AS 47.65.100; 28 (18) establish guidelines for medical assistance providers to 29 develop health care delivery models that encourage adequate nutrition and 30 disease prevention. 31 * Sec. 4. AS 47.05.200(a) is amended to read:
01 (a) The department shall annually contract for independent audits of a 02 statewide sample of all medical assistance providers in order to identify overpayments 03 and violations of criminal statutes. The audits conducted under this section may not be 04 conducted by the department or employees of the department. The number of audits 05 under this section may not be less than 50 each year [, AS A TOTAL FOR THE 06 MEDICAL ASSISTANCE PROGRAMS UNDER AS 47.07 AND AS 47.08, SHALL 07 BE 0.75 PERCENT OF ALL ENROLLED PROVIDERS UNDER THE 08 PROGRAMS, ADJUSTED ANNUALLY ON JULY 1, AS DETERMINED BY THE 09 DEPARTMENT, EXCEPT THAT THE NUMBER OF AUDITS UNDER THIS 10 SECTION MAY NOT BE LESS THAN 75]. The audits under this section must 11 include both on-site audits and desk audits and must be of a variety of provider types. 12 The department may not award a contract under this subsection to an organization that 13 does not retain persons with a significant level of expertise and recent professional 14 practice in the general areas of standard accounting principles and financial auditing 15 and in the specific areas of medical records review, investigative research, and Alaska 16 health care criminal law. The contractor, in consultation with the commissioner, shall 17 select the providers to be audited and decide the ratio of desk audits and on-site audits 18 to the total number selected. In identifying providers who are subject to an audit 19 under this chapter, the department shall attempt to minimize concurrent state or 20 federal audits. 21 * Sec. 5. AS 47.05.200(b) is amended to read: 22 (b) Within 90 days after receiving each audit report from an audit conducted 23 under this section, the department shall begin administrative procedures to recoup 24 overpayments identified in the audits and shall allocate the reasonable and necessary 25 financial and human resources to ensure prompt recovery of overpayments unless the 26 attorney general has advised the commissioner in writing that a criminal investigation 27 of an audited provider has been or is about to be undertaken, in which case, the 28 commissioner shall hold the administrative procedure in abeyance until a final 29 charging decision by the attorney general has been made. The commissioner shall 30 provide copies of all audit reports to the attorney general so that the reports can be 31 screened for the purpose of bringing criminal charges. The department may assess
01 interest and penalties on any identified overpayment. Interest under this 02 subsection shall be calculated using the statutory rates for postjudgment interest 03 accruing from the date of the issuance of the final audit. 04 * Sec. 6. AS 47.05 is amended by adding a new section to read: 05 Sec. 47.05.250. Civil penalties. (a) The department may adopt regulations to 06 assess a civil penalty against a medical assistance provider who violates a provision of 07 this chapter, AS 47.07, or a regulation adopted under this chapter or AS 47.07. 08 (b) A civil penalty imposed under this section may not be less than $100 or 09 more than $25,000 for each occurrence. 10 (c) The provisions of this section are in addition to any other remedies 11 available under this chapter, AS 47.07, or regulations adopted under this chapter or 12 AS 47.07. 13 (d) A medical assistance provider who is assessed a civil penalty under this 14 section may appeal the decision in the manner provided for appeals under AS 44.62 15 (Administrative Procedure Act). The office of administrative hearings (AS 44.64.010) 16 shall conduct the hearing for an appeal. 17 * Sec. 7. AS 47.07.020(g) is amended to read: 18 (g) For a person whose Medicaid eligibility is not calculated using the 19 modified adjusted gross income standard set out in 42 U.S.C. 1396a(e)(14), the 20 [A] person's eligibility for medical assistance under this chapter may not be denied or 21 delayed on the basis of a transfer of assets for less than fair market value if the person 22 establishes to the satisfaction of the department that the denial or delay would work an 23 undue hardship on the person as determined on the basis of criteria in applicable 24 federal regulations. The department may only consider information provided by a 25 person claiming undue hardship that the department verifies through a source 26 other than the person's own statement. 27 * Sec. 8. AS 47.07.020(m) is amended to read: 28 (m) For a person whose Medicaid eligibility is not calculated using the 29 modified adjusted gross income standard set out in 42 U.S.C. 1396a(e)(14), and, 30 except [EXCEPT] as provided in (g) of this section, the department shall impose a 31 penalty period of ineligibility for the transfer of an asset for less than fair market value
01 by an applicant or an applicant's spouse consistent with 42 U.S.C. 1396p(c)(1). 02 * Sec. 9. AS 47.07.030(d) is amended to read: 03 (d) The department shall [MAY] establish [AS OPTIONAL SERVICES] a 04 primary care case management system or a managed care organization contract in 05 which certain eligible individuals, including super-utilizers as identified by the 06 department, are required to enroll and seek approval from a case manager or the 07 managed care organization before receiving certain services. The department shall 08 establish enrollment criteria and determine eligibility for services consistent with 09 federal and state law. 10 * Sec. 10. AS 47.07.030 is amended by adding a new subsection to read: 11 (h) In an annual report to the legislature, the department shall include 12 information separately describing state costs for optional and mandatory services 13 provided under this section. 14 * Sec. 11. AS 47.07.036(b) is amended to read: 15 (b) The department, in implementing this section, shall take all reasonable 16 steps to implement cost containment measures that do not eliminate program 17 eligibility or the scope of services required or authorized under AS 47.07.020 and 18 47.07.030 before implementing cost containment measures under (c) of this section 19 that directly affect program eligibility or coverage of services. The cost containment 20 measures taken under this subsection may include new utilization review procedures, 21 changes in provider payment rates, and precertification requirements for coverage [OF 22 SERVICES, AND AGREEMENTS WITH FEDERAL OFFICIALS UNDER WHICH 23 THE FEDERAL GOVERNMENT WILL ASSUME RESPONSIBILITY FOR 24 COVERAGE OF SOME INDIVIDUALS OR SOME SERVICES FOR SOME 25 INDIVIDUALS THROUGH SUCH FEDERAL PROGRAMS AS THE INDIAN 26 HEALTH SERVICE OR MEDICARE]. 27 * Sec. 12. AS 47.07.036 is amended by adding new subsections to read: 28 (d) Notwithstanding (a) - (c) of this section, the department shall 29 (1) apply for a section 1115 waiver under 42 U.S.C. 1315(a) to use 30 innovative service delivery system models to improve care, increase efficiency, reduce 31 costs, and expand services provided to Indian Health Service beneficiaries through the
01 Indian Health Service and tribal health facilities; 02 (2) apply for a section 1915(i) option under 42 U.S.C. 1396n to 03 improve services and care through home and community-based services to obtain a 50 04 percent federal match; 05 (3) apply for a section 1915(k) option under 42 U.S.C. 1396n to 06 provide home and community-based services and support to increase the federal match 07 for these programs from 50 percent to 56 percent; 08 (4) evaluate and seek permission from the United States Department of 09 Health and Human Services Centers for Medicare and Medicaid Services to participate 10 in various demonstration projects, including payment reform, care management 11 programs, workforce development and innovation, and innovative services delivery 12 models; and 13 (5) enhance telemedicine capability and reimbursement to incentivize 14 its use for Medicaid recipients. 15 (e) Notwithstanding (a) - (c) of this section and in addition to the projects and 16 services described under (d) of this section, the department shall apply for a section 17 1115 waiver under 42 U.S.C. 1315(a) to establish one or more demonstration projects 18 focused on innovative payment models for one or more groups of medical assistance 19 recipients in one or more specific geographic areas. The demonstration project or 20 projects may include 21 (1) managed care organizations as described under 42 U.S.C. 1396u-2; 22 (2) community care organizations; 23 (3) patient-centered medical homes as described under 42 U.S.C. 256a- 24 1; or 25 (4) other innovative payment models that ensure access to health care 26 without reducing the quality of care. 27 (f) The department shall design and implement at least one demonstration 28 project under (e) of this section that is a coordinated care demonstration project using 29 a global payment fee structure. The demonstration project must include a managed 30 care system that operates within a fixed budget to reduce medical cost inflation, 31 improves the quality of health care for recipients, and results in a healthier population.
01 The department shall design the managed care system to reduce the growth in medical 02 assistance expenditures with a goal of reducing the per capita growth rate for medical 03 assistance expenditures by at least two percentage points. The managed care system 04 must implement alternative payment methodologies and create a network of patient- 05 centered primary care homes, and will be measured based on quality and performance 06 outcomes. The department shall prepare a report regarding the progress of this 07 demonstration project and shall, on or before February 1, 2019, deliver the report to 08 the senate secretary and the chief clerk of the house of representatives and notify the 09 legislature that the report is available. 10 (g) In this section, "telemedicine" means the practice of health care delivery, 11 evaluation, diagnosis, consultation, or treatment, using the transfer of medical data 12 through audio, visual, or data communications that are performed over two or more 13 locations between providers who are physically separated from the recipient or from 14 each other. 15 * Sec. 13. AS 47.07.900(4) is amended to read: 16 (4) "clinic services" means services provided by state-approved 17 outpatient community mental health clinics [THAT RECEIVE GRANTS UNDER 18 AS 47.30.520 - 47.30.620], state-operated community mental health clinics, outpatient 19 surgical care centers, and physician clinics; 20 * Sec. 14. AS 47.07.900(17) is amended to read: 21 (17) "rehabilitative services" means services for substance abusers and 22 emotionally disturbed or chronically mentally ill adults provided by 23 (A) a drug or alcohol treatment center [THAT IS FUNDED 24 WITH A GRANT UNDER AS 47.30.475]; or 25 (B) an outpatient community mental health clinic [THAT HAS 26 A CONTRACT TO PROVIDE COMMUNITY MENTAL HEALTH 27 SERVICES UNDER AS 47.30.520 - 47.30.620]; 28 * Sec. 15. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 DEMONSTRATION PROJECT: REDUCING PRE-TERM BIRTHS. On or before 31 January 1, 2017, the Department of Health and Social Services shall design and implement a
01 demonstration project for the purpose of reducing pre-term birth rates in the state from the 02 current rate of 8.5 percent. The demonstration project shall provide for the voluntary 03 enrollment of approximately 500 recipients who are eligible for medical assistance under 04 AS 47.07.020(b)(14). The Department of Health and Social Services shall offer pregnancy 05 counselling, nutritional counselling, and, as necessary, vitamin D supplementation to maintain 06 levels of 40 ng/ml vitamin D during pregnancy for participants in the demonstration project. 07 The demonstration project may be modeled after the Protect Our Children NOW! project 08 implemented as a cooperative project of the South Carolina Department of Health and Human 09 Services and private health organizations. The goal of the demonstration project is to achieve 10 a reduction in pre-term births in the state, consistent with the results of the following 11 published studies: Wagner, C. L., et al., "A Randomized Trial of Vitamin D Supplementation 12 in Two Community Health Center Networks in South Carolina," American Journal of 13 Obstetrics and Gynecology 208 (February 2013); Bodnar, L. M., et al., "Maternal 25- 14 Hydroxyvitamin D and Preterm Birth in Twin Gestations," Obstetrics and Gynecology 122 15 (July 2013). 16 * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 MEDICAID MANAGED CARE FOR SUPER-UTILIZERS. On or before January 1, 19 2017, the Department of Health and Social Services shall 20 (1) establish a primary care case management system or a managed care 21 organization contract under AS 47.07.030(d), as amended by sec. 9 of this Act, for super- 22 utilizers, as identified by the department; and 23 (2) deliver a report on the system or contract to the senate secretary and the 24 chief clerk of the house of representatives and notify the legislature that the report is 25 available. 26 * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to 27 read: 28 MEDICAID REDESIGN; REPORTS TO LEGISLATURE. (a) On or before May 30, 29 2016, the Department of Health and Social Services shall deliver to the senate secretary and 30 chief clerk of the house of representatives the Report on Recommended Action and 31 Evaluation Plans for Expansion and Reform prepared for the department under the Medicaid
01 Redesign and Expansion Technical Assistance study, advertised under request for proposal 02 number 2015-0600-3077, issued April 21, 2015, and the department shall notify the 03 legislature that the report is available. 04 (b) The Department of Health and Social Services shall prepare a report summarizing 05 cost-sharing measures implemented before October 1, 2015, by the Department of Health and 06 Social Services under AS 47.07.042 and describing the effect of those measures on the state 07 budget. On or before the 20th day following the effective date of this section, the Department 08 of Health and Social Services shall deliver a copy of the report to the senate secretary and 09 chief clerk of the house of representatives and notify the legislature that the report is 10 available. 11 (c) On or before February 1, 2019, the Department of Health and Social Services shall 12 complete a report informing the legislature of the results of the applications for waivers and 13 options under AS 47.07.036(d)(1) - (3), enacted by sec. 12 of this Act, and shall deliver the 14 report to the senate secretary and chief clerk of the house of representatives and notify the 15 legislature that the report is available. The report must include 16 (1) information explaining whether the department's applications for a section 17 1115 waiver under 42 U.S.C. 1315(a), a section 1915(i) option under 42 U.S.C. 1396n, and a 18 section 1915(k) option under 42 U.S.C. 1396n were approved by the United States 19 Department of Health and Human Services; 20 (2) a description of cost savings to the state resulting from the programs 21 implemented under the waivers, including 22 (A) the extent to which the programs implemented under the section 23 1115 waiver under 42 U.S.C. 1315(a) achieved the savings estimated by the 24 department; 25 (B) the extent to which the programs implemented under the section 26 1915(i) and (k) options under 42 U.S.C. 1396n achieved the savings estimated by the 27 department. 28 * Sec. 18. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 MEDICAID STATE PLAN INSTRUCTIONS; NOTICE TO REVISOR OF 31 STATUTES. The Department of Health and Social Services shall immediately amend and
01 submit for federal approval a state plan for medical assistance coverage consistent with this 02 Act. The Department of Health and Social Services shall apply to the United States 03 Department of Health and Human Services for any waivers necessary to implement this Act. 04 The commissioner of health and social services shall notify the revisor of statutes in writing if 05 the United States Department of Health and Human Services approves the provisions of 06 AS 47.07.030(d), as amended by sec. 9 of this Act, and the provisions of secs. 12(e), 12(f), 07 15, and 16 of this Act. 08 * Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 TRANSITION: REGULATIONS. The Department of Health and Social Services may 11 adopt regulations necessary to implement the changes made by this Act. The regulations take 12 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 13 relevant provision of this Act implemented by the regulation. 14 * Sec. 20. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 REVISOR'S INSTRUCTION. The revisor of statutes is requested to change the catch 17 line of AS 47.07.036 from "Cost containment measures authorized" to "Medical assistance 18 cost-containment and reform measures authorized." 19 * Sec. 21. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 CONDITIONAL EFFECT. (a) AS 47.07.030(d), as amended by sec. 9 of this Act, and 22 sec. 16 of this Act take effect only if the commissioner of health and social services notifies 23 the revisor of statutes in writing under sec. 18 of this Act, on or before January 1, 2017, that 24 all of the provisions added by AS 47.07.030(d), as amended by sec. 9 of this Act, and all of 25 the provisions of sec. 16 of this Act have been approved by the United States Department of 26 Health and Human Services. 27 (b) Section 12(e) of this Act takes effect only if the commissioner of health and social 28 services notifies the revisor of statutes in writing under sec. 18 of this Act, on or before 29 February 1, 2019, that all of the provisions added by sec. 12(e) of this Act have been 30 approved by the United States Department of Health and Human Services. 31 (c) Section 12(f) of this Act takes effect only if the commissioner of health and social
01 services notifies the revisor of statutes in writing under sec. 18 of this Act, on or before 02 February 1, 2019, that all of the provisions added by sec. 12(f) of this Act have been approved 03 by the United States Department of Health and Human Services. 04 (d) Section 15 of this Act takes effect only if the commissioner of health and social 05 services notifies the revisor of statutes in writing under sec. 18 of this Act, on or before 06 January 1, 2017, that all of the provisions added by sec. 15 of this Act have been approved by 07 the United States Department of Health and Human Services. 08 * Sec. 22. If AS 47.07.030(d), as amended by sec. 9 of this Act, and sec. 16 of this Act take 09 effect, they take effect on the day after the date the commissioner of health and social services 10 makes a certification to the revisor of statutes under secs. 18 and 21(a) of this Act. 11 * Sec. 23. If sec. 12(e) of this Act takes effect, it takes effect on the day after the date the 12 commissioner of health and social services notifies the revisor of statutes in writing under 13 secs. 18 and 21(b) of this Act. 14 * Sec. 24. If sec. 12(f) of this Act takes effect, it takes effect on the day after the date the 15 commissioner of health and social services notifies the revisor of statutes in writing under 16 secs. 18 and 21(c) of this Act. 17 * Sec. 25. If sec. 15 of this Act takes effect, it takes effect on the day after the date the 18 commissioner of health and social services notifies the revisor of statutes in writing under 19 secs. 18 and 21(d) of this Act. 20 * Sec. 26. Sections 17(a), 18, 19, and 21 of this Act take effect immediately under 21 AS 01.10.070(c).